Population Growth Seen As A Key Driver Of Ohio’s Future Economic Success

Ohio has succeeded in creating jobs, but continues to lag behind other states in key indicators of economic growth, according to a report released Tuesday.

The report produced by Montrose Development Advisors noted the world is moving away from traditional manufacturing that for decades bolstered the state’s economy and toward new types of businesses. It was intended to focus on policy areas that can support the state’s economic well-being.

While economic development tools like JobsOhio can help recruit businesses, broader policy areas can play a much more significant role, Dave Robinson, founder of The Montrose Group, said at a briefing on the report.

“The reality is the public policy issues we adopt from a tax, a workforce, an infrastructure standpoint, they matter a lot more than the tactical piece,” he said.

Mr. Robinson detailed the report’s findings, which contrasted Ohio’s economy with those of states that have seen much more growth, including North Carolina, Texas and Florida. Ohio’s population has grown slightly since 1960, while Texas has nearly tripled in population after being about Ohio’s size that year.

“We are not growing from a population standpoint at the rate we need to. We think it’s a dramatic economic issue,” Mr. Robinson said. “Growing markets attract investment. They provide larger markets for a whole wide range of companies. We think long term the state needs to find ways to address the population growth.”

Over the next eight years, Mr. Robinson said the state should hope to add a million net new people and 750,000 jobs, while growing per capita income by 30%. Much of that growth can be achieved by encouraging young people who are attending college in the state to stay.

Other challenges lie in the state’s struggles to create new information technology jobs at the same rate as competing states, he said. The state should strive to attract $5 billion of venture capital in early-stage Ohio companies in the next eight years, he suggested.

“We are really struggling to figure out how to succeed in a deindustrialized world,” he said.

Economic development also needs to be emphasized in rural areas, not just in major metro areas such as Columbus, he said. The group recommended the creation of a Rural Infrastructure Authority, functioning like a statewide port authority.

To help rural areas, the state must stop an overall population decline. In the last five years, rural counties have lost a total of 40,000 people, he said.

“You cannot recruit employers, you can’t keep employers, if you can’t keep a population base,” he said.

Transportation and infrastructure also account for key parts of the report, said Nate Green, director of economic development for the Montrose Group. He said the state should invest $14 billion into infrastructure projects, including public transit.

Ohio’s $40 million included in the state budget for public transit pales in comparison to Pennsylvania’s $840 million, Minnesota’s $340 million and Michigan’s $200 million, he said.

Mr. Robinson said Austin, Texas, has seen so much growth recently that residents have begun to push back against even sensible development projects. Most of that reaction stems from traffic problems.

“The answer to that is transit,” he said. “The answer to that is mobility.”

The group had a panel of economic development experts and others provide their feedback on the report after the briefing.

Pat Tiberi, president and CEO of the Ohio Business Roundtable, said the report shows Ohio is moving in the right direction, recouping jobs lost in recent years, but that the state has more to do to compete with other states.

“We need people. We need talent. All of my members say that and it’s a huge problem for our state moving forward,” he said. “Ohio is in a really good position, but we need to keep our talent here, we need to encourage more talent to come here, it’s a huge issue moving forward.”

Mr. Tiberi also pointed to opportunity zones, a tool created in the recent federal tax overhaul package that he backed as a member of Congress. The zones are designed to encourage investment in impoverished census tracts. While that is a federal policy available to every state, he said, Ohio could provide similar incentives centered on state taxes.

“What will distinguish us from other states is if the state creates opportunity zones,” he said.

Lydia Mihalik, the mayor of Findlay, said communities need to create environments that are conducive for investment. Companies looking to come to Ohio are mostly focused on whether those communities have the workforce available to meet their needs.

As automation grows more common, Ms. Mihalik said policymakers need to figure out ways to discourage companies from cutting too many workers.

“We’ve got to figure out ways to incentivize job retention, not just job creation,” she said.

Bruce Johnson, president of the Inter-University Council of Ohio, said the state needs to prepare for the “innovation economy.” Young Ohioans shouldn’t be training for the jobs of today, but to be the job creators and entrepreneurs of tomorrow, he said.

“We need to focus on high-wage, high-growth areas of the nation’s economy,” he said. “We need to skate to where the puck is going, not to where it is today.”

Joanna Pinkerton, president and CEO of the Central Ohio Transit Authority, said economic development actions need to be made in conjunction with housing and transportation solutions.

“Don’t bother creating a program for people if you can’t move them there and if they don’t have a place to live,” she said.

Jennifer Ekey, director of economic development for the City of Middletown, said communities need to think more holistically about transportation solutions. She said many workers coming to jobs in Middletown were coming from the Dayton and Cincinnati areas, where there was not easy public transit. The city worked with neighbors to create new transit routes.

“We have a job for you, but one of our hurdles was how do we get them there?” she said.

For Sara Marrs-Maxfield, executive director of the Athens County Economic Development Council, workforce isn’t the problem, as many Ohio University students want to stay in the area and start businesses after graduating. The concerns are that housing is expensive and sites are hard to come by.

She said JobsOhio should do more to encourage entrepreneurship and start-up businesses.

“We would like to see the programs expanded a little bit more to encourage entrepreneurship, to encourage some of these smaller businesses that are in that growth mode,” she said.

Why Athens?

“Athens has a very healthy entrepreneurial environment,” he reflected. “It has an excellent startup culture, particularly in the area of tech growth.” – Neill Lane, Global Cooling